Just heard a great interview on NPR’s Planet Money with trader Vinny Catalano that shed some light on current our economic woes. Apparently we shouldn’t be watching the DOW average, we should keep our eyes on the credit market.

The credit markets, specifically the commercial paper markets, are frozen and that’s effecting business’s ability to operate. This disruption of day to day operation is lowering investor confidence in business which in turn is causing the DOW drop.

As long as the credit market is frozen the DOW will continue to drop.

There are two indicators to watch to see if the credit market is thawing out. One is the US Treasury Bill 3 month yield rate. As this rate goes up that means less money is being hidden in the giant government “mattress” and is again available for lending. The other factor is something called the TED Spread which tracks the LIBOR less the 3 month Treasury Bill. As this number goes down that means that banks are beginning to lend to each other and the credit market is thawing.

So keep an eye on the 3 month T-Bill, as that rate goes up and the Ted spread goes down then we know capital and credit are flowing again. At this point the Stock market should rebound and we should be out of the woods. Make money make money makemoneymonay!

Listen to the Planet Money show here.

Read Catalano’s Blog about this here.

Track the TED Spread here.

Track the 13 week treasury bills here.

&^@#$!

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So how did y’all think old Johnny boy do last night?

I think they fucked up the speech big time. The first 30 minutes was just ramblin’ all over the place with McCain as the terrible orator that he is. Then the personal story and how that changed him as a man… thats the whole shooting match right there. Its political gold, so why let old Crusty ramble on disjointedly like Admiral Stockdale for 30 minutes until everyone shuts it off or changes the channel. You gotta lead in with the big sell if you can’t memorize folks with yer pillow talk.

There was a good 10 minute stretch were you could see the crowd go all glassy eyed and mutter to themselves,

“Oh shit! This guy is terrible.”

The only real excitement came from a few protesters and watching Todd Palin (The 1st dude) look down his wife’s shirt. That and giving a running commentary of all the shit they leave out of the bio films, like McCain’s 1st wife, how he was 41& married with 3 kids when he met and started dating the 24 yr old Cindy. What about Cindy McCain’s fortune and hows she is Johns political sugar momma, (shades of John Kerry) not to mention her struggles with prescription pill addiction.

Also funny that “The Maverick” didn’t thank the 162 lobbiests that work for his campaign. I’m sure that they to are all selfless patriots that only want to serve a larger and greater good. Thankfully the ‘liberal’ media covered all of this in depth… groan

A couple of weeks ago the fine people over at NPR’s “This American Life” took the time to delve deep into the housing crisis that’s effecting our economy. I’ve neither seen nor heard a better explanation than the one presented here. Do yourself a favor, take an hour and listen to this surprising, insightful and often funny show about “The Giant Pool of Money.” I think you’ll be pleasantly surprised by the lying and the greed. Enjoy!